Sunday, December 7, 2008

Ksubi, or not Ksubi: Will Renzo Rosso give a rat’s?

gorrow (L) and single @ ksubi bondi, november 27/the cobrasnake

“Ksubi goes pop” was the headline of a story on November 24, referring to the hipster Sydney denim label’s plans to transplant its 'Lest We Regret' pop-up store to London in early 2009. The pop-up store recently debuted within the Little Collins Street boutique of Melbourne streetwear label Schwipe - which installation, incidentally, was reported elsewhere to have been decorated with jars containing Ksubi’s shredded financial records. In the wake of a spate of recent reports – which follow at least six months of ragtrade buzz that Ksubi has, once again, been unable to pay its bills – some may well be wondering if the headline might have been a self-fulfilling prophecy. Especially if Diesel founder Renzo Rosso, or some other party, does not come to the rescue.

Picking up earlier reports in The Age, The Herald Sun and The Sunday Telegraph, on December 1st Runway Reporter reported that 15 Ksubi staff had been made redundant and that an urgent director’s meeting was scheduled for last week.

A debt burden of A$8million has been bandied about by several media outlets, including The Sydney Morning Herald, whose Private Sydney column on Saturday revealed that the company may be in talks with Rosso – even if rumours of both discussions with Rosso and “crippling debt” were hosed down by directors Dan Single, George Gorrow and “executive consultant” Harry Hodge.

In a statement, Single and Gorrow told the SMH:

"It's absolutely not true that Ksubi has been bought by Diesel or any other party. We have never even met with them before. We are, however, heading to Asia and Europe next week to talk business with our manufacturers and distributors."

Hodge told The Herald’s Andrew Hornery:

"Sure, we have had redundancies and trading is difficult at the moment, but it's difficult for everyone. We have had to raise capital in the past and we may well do that again in the future".

Yes, times are tough. And whichever way it swings, Ksubi is by no means the only fashion company to fall victim to the global economic crisis. Two young high-profile Danish labels, Jens Laugesen and Camilla Staerk, recently shuttered.

The US retail market, which would have accounted for an important chunk of Ksubi’s estimated A$24million sales turnover, is in very, very bad shape. It is rumoured that Ksubi has now closed its US office.

Sydney eveningwear specialist Jayson Brunsdon recently described the impact on his US Fall/Winter 0809 sales as “a disaster” - and, like sass & bide, did not show at the SS09 New York shows in September.

Another Sydney denim brand, 18th Amendment, revealed to WWD earlier this year that the company had pulled out of more than 100 US stockists and was attempting to claw back a A$500,000 debt out of the US, from stockists who were not paying. 18th Amendment director Rachel Rose conceded that the brand, which launched in 2006, had been sold too widely in the US market.

But with Zimmermann reporting growth in the US, evidently, success – nay survival – depend on a company’s business model. Zimmermann is of course not in the denim market. The company has moreover spent a decade building up its brand equity in the US swimwear and resortwear market, which may well have partially insulated it from the recent downturn.

But while Ksubi may be able to apportion some blame to the current economic crisis, this is not the first time the company has experienced problems.

Ksubi launched at Australian Fashion Week in May 2001, originally under the Tsubi brand name, with a runway show that was famously infested with 169 rats.

By November 2005 the Australian and New Zealand ragtrade was rife with rumours that Tsubi owed money to suppliers.

Although Single flatly denied the company was experiencing cashflow problems, one supplier told this journalist at the time that his company was owed several hundred thousand dollars – part of what was understood to be a much wider debt to other suppliers that could have been as high as A$1million.

Then in April 2006, Single and Gorrow found themselves embroiled in a trademark dispute with Californian footwear brand Tsubo.

When asked about the dispute, Gorrow told the SMH:

"I haven't heard that. I don't even know these guys. I don't even know who they are. Have you ever seen one of their shoes? Maybe I've been drunk for the past 12 months."

According to Tsubo’s lawyer, Jack Douglas, however, Tsubo’s communications with Tsubi had dated back several years but were ignored by Tsubi, prompting Tsubo to commence legal proceedings in the Federal Court in New York.

The parties settled out of court, with Tsubi permitted to retain its original name within Australia, but obliged to adopt the new brand name of Ksubi in the rest of the world.

Although dubbed by Dan Single as "a great result for Tsubi", the two-brand scenario was described by Sam Osborn, the Australian ceo of Interbrand, the world’s best-known branding consultancy, as a potential “branding nightmare” for Tsubi.

Shortly thereafter, a decision was made to adopt the universal brand name of Ksubi.

According to Interbrand's Osborn, the rebranding process alone could have cost A$1million.

In May last year, much ado was made of the arrival of Quiksilver Europe co-founder Hodge as a minority shareholder.

Hodge’s private investment company Kauai may have already been a Ksubi creditor – having reportedly loaned Ksubi A$550,000 in November 2006.

In a statement, Single and Gorrow said:

“As Ksubi aspires to grow its international reputation to become one of the leading fashion and lifestyle brands, we knew we had to bring in people who could guide the growth of our brand as we expand across many different product areas and grow our global business.”

According to sources, Single and Gorrow had planned to take the brand to A$100million sales.

But could Renzo Rosso be seriously interested in helping them do it?

The 53 year-old Italian, who is rapidly turning into one of the new titans of the global fashion business, is already busy with his own blockbuster denim/streetwear brand Diesel, which reportedly accounted for 90percent of the 1.3billion euro 2007 revenues of Rosso’s Only The Brave parent company.

Then there is the burgeoning brand portfolio of Only The Brave’s Staff International subsidiary, whose latest addition, a five-year licensing agreement with Marc Jacobs menswear, joins a stable that already includes either controlling interests in, or global manufacturing/distribution licensing rights for, names such as Maison Martin Margiela, Viktor & Rolf, Vivienne Westwood, Dsquared and Sophia Kokosalaki.

Sure, Dsquared and co boast a denim component, however Rosso’s impresario penchant would appear to be tickled more by high profile, niche luxury brand names in need of a financial legup – than denim/streetwear rivals seeking to cannibalise Diesel’s market share.

But let’s wait and see.

It sounds as if Ksubi may have to take a number in the growing line of other Rosso hopefuls, which reportedly include London-based denim brand Superfine, which was co-founded by Australian Lucy Pinter.

In the meantime, if Ksubi does indeed owe anywhere near A$8million, then presumably there are a lot of nervous 'little' people out there.

Unlike Single and Gorrow, the latter don’t lead 'rock star' lifestyles, DJ on the Euro dance party circuit or get their faces on the photoblog of great Ksubi mate Mark 'The Cobrasnake' Hunter.

But Ksubi could not have made its garments without them.

No doubt they are concerned that they may face the prospect of never being paid.


Anonymous said...

The problem with Ksubi is there is no love in the brand anymore.Once upon a time it wasn't just about "the life style of the Ksubi boys" that made the brand cool but the clothes itself was on the money,its was new, it was fresh.
Nowdays Dan and George are just too busy partying and making famous friends while they really have nothing great to sell to the people that made them big in the first place..the public,they are out of touch.
Once street kids with dreams are now just egotistical fashion wankers living in a delusional Ksubi world filled with wannbe social climbers hoping that one of the boys would give them there meal tickets to stardom eg Pip Edwards(the lucky one and self proclaim A-list Celeb).
Everything is formulated and develope by a bunch of in house product developers,sitting on there asses knocking off Japanese streetwear while Dan and George are being cool at Bondi Iceberge drinking cocktails and racking up depts.
Perhaps the only real talent in the Ksubi gang was the one that got away,Gareth Moody.
A genuin talented designer ( who still walk around with a design sketch pad) who was over looked by his ex-business partners and was paid to walk of the label.
Slow and steady for few seasons now Moody have been delevoping a strong personal style and designing his signature label,Chronicles Of Never, with a strong following.
Why am I saying this?
well thank god its about talent and good original products at the end of the day not necessary the "├╝ber cool" fantasy life style you lead that gets people buying fashion and I guess this is what the fashion industry needs right now to save themselves from this difficult financial crisis.
Dan and George are great examples of what not to do.

Anonymous said...

I completely agree. They've lost the edge and are just toolish

Jana said...

I didn't realise so many other people felt the same way. I was into Tsubi at first. Even though they were over priced, their product was good. Then it became self-indulgent. Looking back, I guess that was around the time Moody left. Now, it looks like everything else.

I admit that even if their product were good, their brand has completely turned me off.

I'd much rather see Superfine saved.

Anonymous said...

Well said Anonymous, my sentiments exactly- though i don't have a problem with a label selling a "lifestyle"- Chanel, Marc Jacobs et al all do this as well too- the difference seams to be the blatent disrespect for customers with shoddy, ripped off, pieces and the reliance on their "friends" (like model Erin W.)to sell their slock.

On another note, if that picture is anything to go by, they are starting to look old. Some new, fresh, unjaded entrepreneurs will steal their "cool kids" crown soon enough (meow!)

Anonymous said...

I remember when Ksubi was uber cool, everyone wore them and wanted those jeans with 2 crosses and squares on back of their thighs.. but now.. NO ONE wears them, people wear April 77 or Claud Maus jeans.. Nudies perhaps? They should of re-invent themselves just like others. Fashion is all about Changes.. No one likes boring pair of jeans.

Sophie said...

Erin Wasson, paid friend whose own designs look exactly like Bliss Lau's

Real cool (not).

Anonymous said...

Anonymous 1 you took the words right out of my mouth,I am glad I am not the only one who feels the same.
I guess what goes up must comes down at the end of the day.

Terry said...

OMG is that them ??!!
they look so old and tired! eeekkkk! How old are they?

Patty Huntington said...

30 (single) and 34 (gorrow), something like that.

how many of you are genuine punters, and how many may be competitors, is impossible to gauge, primarily due to the shortcomings of this blinking blogger comment system.

but let's try to leave the personal insults out of this and focus on the business/brand issues.

Anonymous said...

I think the difficulty with separating business and personality issues when talking about Ksudi is that as you yourself pointed out their personalities and lifestyles are so intrinsically linked with the brand. I have to say i don't think the clothing has changed much at all (in terms of quality or style), I think the backlash is fueled by their (particularly Dan's) overexposure- people are getting "over" that whole LA-club-kid-Corey Kennedy-Corbrasnake scene, and by assocaition the brand is becoming less and less relevent. They need to move on, revamp themselves, or risk decending into obsecurity as a brand (and perhaps as social forces too?)

Oh, i am the 4th poster here too, i wish i was exciting enough to be considered a "competitor", but i'm just a consumer "punter"!

Anonymous #1 said...

Lets face it Paddy most of us who reads your blog are most likely in the fashion industry but some perhaps just your followers from but every opinion in this case counts cos its a very interesting topic,almost like a social perception test and a survey on Ksubi "the Brand" and "The image".... so thanks for writing.
For so long now Ksubi long success in the rag trade was partly because there clever cool image,style and identity in the market and the fact that they were representing the streets culture and those who wasnt fashion.
They showed us you dont have to be dressed up to be fashionable,they showed us that you dont have to be the Peter Morrissey or the Wayne Cooper type to be chic,they gave us a sense of humour which we were lacking in the fashion industry at that time.
They were the underdog that could not be defeated and people can have that attitude by wearing there clothes cos there style was speaking for the people.
When they put rats on the runway and freak out front row buyers and journalist,bad reviews at the time did not seem to effect them in a bad way but only seem to boost there sales.
Negetive opinion from the mass or the competitors should not reflect badly on Ksubi identity or owner if the brand still have a strong hold in the market place( which they once did) cos after all Ksubi was once all about anti-establishment,rebellion,freedom of speech,tell it like it is and great designs concepts that reflects what global youth culture and consumers wants and desire.

Royalty,Heroism and The Street...where did it go?

Anonymous said...

Gazing at these comments i like staring at the sun, no real sense. I knew them before the business started, and i still know them. Objectively I've always seen absolutely nothing in their product, and have numerous times in my returns to Australia, mumbled some vain babble about their sheep. But one thing no one here is mentioning as they chop down a tall tree, if you know anything about business, it needs a plan, and theirs sucked you all in from the beginning. For that they could be genius's, and you the dear consumer the fool. And yes i own a successful Fashion Brand, from Australia, and despise denim.

Anonymous said...

No they weren't that much of a genius's except maybe George cos he is the businessman but they just had the right product for a while.Dan use to buy fabric from Spotlight cos he didn't know that you can by it from whole saler in the early years...not so genius.
I know them from the start too,I just don't want to know them now. I'm sorry you can't read Mr.Last Anonymous (Big time successful Fashion Brand owner) most of these are just opinions from people and how they receive Ksubi thats all.Dont have to look deep mate.

Anonymous said...

Oh dear last Anonymous,you know who you are!!!! Should never write stuff on your i-phone half drunk
buddy and check your spelling mistakes dude! loser! haha

Anonymous said...

Some of ksubi's stuff is still awesome as. But look at some of the tshirts and such, are just stupid and so basic. They are starting to ween money out of people based on their name not their clothes. Please ksubi some of us want to wear amazing clothes not just your name.

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